Camac Partners Condemns Forte Biosciences’ Seemingly Defensive and Unjustifiable Capital Raise

Rhea-AI Summary

Camac Partners, LLC, a major shareholder of Forte Biosciences, Inc. (FBRX), has expressed serious concerns regarding the company's management and board decisions. They noted that Forte's shares have plummeted approximately 95% since its IPO, trading at a 40% discount to its cash reserves of $45 million. The board's recent dilutive capital raise is viewed by Camac as self-serving and lacking justification. Camac urges the board to reconsider its capital allocation strategy and return funds to shareholders, threatening potential legal action if governance issues continue.

Positive

• Camac Partners has significant ownership, indicating confidence in the company's potential.
• Forte has a cash reserve of approximately $45 million, suggesting underlying value.

Negative

• Forte's share price has declined approximately 95% since its IPO, raising concerns about investor confidence.
• The board's decision to conduct a highly dilutive equity capital raise may impair shareholder value.
• Emergence of four separate Schedule 13D filers indicates widespread dissatisfaction with the board's governance.
• The company trades at a roughly 40% discount to cash, highlighting potential mismanagement.

Fears the Board has Diluted Shareholders for Self-Serving Purposes Following the Emergence of Four 13D Filers, Suggesting the Directors Have Potentially Breached Their Fiduciary Duties

Notes the Company Trades at a ~40% Discount to Cash

Urges the Board to Reverse Course and Return Capital to Long-Suffering Shareholders – or Risk Facing Action from Camac

NEW YORK--(BUSINESS WIRE)-- Camac Partners, LLC (together with its affiliates, "Camac" or “we”), which is one of the largest shareholders of Forte Biosciences, Inc. (Nasdaq: FBRX) (“Forte” or the “Company”), today expressed concerns regarding the Company’s sizable trading price discount relative to its cash on hand and the Board of Directors’ (the “Board”) decision to conduct a highly dilutive equity capital raise following the emergence of four separate Schedule 13D filers.

Eric Shahinian, founder and managing member of Camac, commented:

“Since Forte’s initial public offering, the Company’s share price has declined approximately 95%. We believe shareholders have lost all confidence in Forte due to the Board and management’s failure to establish a sensible capital allocation strategy, as well as inexcusable lapses in governance. We understand why the Company now trades at an approximately 40% percent discount to its roughly $45 million in cash. To make matters worse, following the emergence of four separate 13D filers that independently possess significant concerns, the Board has conducted a dilutive capital raise at a massive discount to cash that we view as defensive and without a justifiable business purpose. Rather than take such a brazen step that permanently impairs investors, the Board should consider how to return capital to the Company’s long-suffering shareholders.

We are now putting the Board on notice that Camac is prepared to take any and all actions to protect its investment, which could include initiating litigation against the directors and garnering support from fellow shareholders to remove all directors for cause pursuant to section 20(b) of the Company's bylaws. It seems to us that the Board is more focused on entrenchment than honoring its fiduciary duties. If that is not the case, the Board should promptly announce a plan to return capital to shareholders."

About Camac

Camac is a private investment firm founded in 2011. Camac focuses on extremely mispriced assets in discrete pockets of opportunity. Camac prides itself on its unique sourcing, flexible mandate, and constant focus on non-competitive opportunities. Its investments are long term in nature and focused on compounding capital over several decades rather than months or years.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220817005265/en/

Longacre Square Partners

Greg Marose / Kate Sylvester, 646-386-0091

gmarose@longacresquare.com / ksylvester@longacresquare.com

Source: Camac Partners, LLC

FAQ

What concerns did Camac Partners raise regarding Forte Biosciences (FBRX)?

Camac Partners expressed concerns about Forte's significant share price decline, management decisions, and a dilutive capital raise.

What is the current trading status of Forte Biosciences (FBRX)?

Forte trades at a 40% discount to its cash reserves of $45 million, with shares down approximately 95% since its IPO.

What actions is Camac Partners considering regarding Forte Biosciences' board?

Camac is prepared to initiate litigation and rally shareholder support to potentially remove the board members for cause.

What financial problems does Forte Biosciences (FBRX) face according to Camac?

Forte's substantial trading discount and the board's dilutive capital raise are seen as serious financial management issues.